Chapter 11 - Organizational Design
Organization
a deliberate arrangement of people assembled to accomplish some specific purpose (that individuals independently could not accomplish alone). common characteristics: - have a distinct purpose (goal) - are composed of people - have a deliberate structure
Organizational Design
a process involving decisions about six key elements: - work specialization - departmentalization - chain of command - span of control - centralization and decentralization - formalization
Cross-Functional Team
a work team composed of individuals from various functional specialties
Functional Structure
an organizational design that groups together similar or related occupational specialties
Organic Organization
an organizational design that's highly adaptive and flexible
Mechanistic Organization
an organizational design that's rigid and tightly controlled
Simple Structure
an organizational design with low departmentalization, wide spans of control, centralized authority and little formalization
Divisional Structure
an organizational structure made up of separate, semiautonomous units or divisions
Organizing
arranging and structuring work to accomplish an organization's goals
Size and Structure
as organization grows larger, the structure tends to change from organic to mechanistic with increased specialization, departmentalization, centralization and rules/regulations
Line Authority
authority that entitles a manager to direct the work of an employee
Departmentalization
basis by which jobs are grouped together
Chain of Command
continuous line of authority that extends from upper levels of an organization to the lowest levels of the organization - clarifies who reports to whom
Work Specialization
dividing work activities into separate job tasks - believed it could lead to great increases in productivity - overspecialization can result in boredom, fatigue, stress, ect
Employee Empowerment
giving employees more authority (power) to make decisions
Functional
grouping jobs by functions performed
Product
grouping jobs by product line
Customer
grouping jobs by type of customer and needs
Process
grouping jobs on the basis of product or customer flow
Geographical
grouping jobs on the basis of territory or geography
Staff Authority
positions with some authority that have been created to support, assist, and advise those holding line authority
Centralization
the degree to which decision making is concentrated at upper levels of the organization
Formalization
the degree to which jobs within the organization are standardized and the extent to which employee behavior is guided by rules and procedures - highly formalized jobs offer little discretion over what is to be done - low formalization means fewer constraints on how employees do their work
Decentralization
the degree to which lower-level employees provide input or actually make decisions
Organizational Structure
the formal arrangement of jobs within an organization
Unity of Command
the management principle that each person should report to only one manager
Span of Control
the number of employees who can be effectively and efficiently supervised by a manager
Responsibility
the obligation or expectation to perform
Authority
the rights inherent in a managerial position to tell people what to do and to expect them to do it
Acceptance Theory of Authority
the view that authority comes from the willingness of subordinates to accept it
Organizational Chart
the visual representation of an organization's structure
Strategy and Structure
- changes in corporate strategy should lead to changes in organization's structure that support the strategy - certain structural designs work best with different organizational strategies (organic = meaningful/unique innovations; mechanistic = tightly control costs)
Purposes of Organizing
- divides work to be done into specific jobs and departments - assigns tasks and responsibilities associated with individual jobs - coordinates diverse organizational tasks - clusters jobs into units - establishes relationships among individuals, groups, and departments - establishes formal lines or authority - allocates and deploys organizational resources
Environmental Uncertainty and Structure
- mechanistic organizational structures tend to be most effective in stable and simple environments - the flexibility of organic organizational structures is better suited for dynamic and complex environments
Technology and Structure
- organizations adapt structures to their technology
Woodward's Classification of Firms Based on Complexity of the Technology Employed
- unit production of single units or small batches - mass production of large batches of output - process production in continuous process of outputs